Gilead Sciences: Pricing Concerns Just Noise?

By Ben Levisohn

Gilead was pilloried again yesterday for developing a drug (Sovaldi) with the highest efficacy and fewest side effects, but at a high (but not the highest) price for a new HCV therapy. The cost-benefit ratio suggests it is not the most expensive therapy in the HCV space. While the politics of Washington are not surprising, the fact that a pharmacy distribution company [Express Scripts (ESRX)] would make what we consider to be political statements is damaging to the industry and patients they serve. They, better than us, understand the benefits of Sovaldi. We view these statements as noise and believe that Sovaldi and next-generation Ledipasvir/Sovaldi represent real pharmaco (economic) value in the HCV space.

Shares of Gilead have gained 1.4% to $71.00 at 1o:01 a.m. today, although it should be noted that its main competitors in the hepatitis C space are as well. Shares of Merck (MRK) have risen 1.5% to $55.89 and AbbVie (ABBV) is up 1.6% at $49.87. Express Scripts has ticked up 0.2% to $72.92.

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There are 2 comments

APRIL 9, 2014 11:28 A.M.

BobinIrving wrote:

Gilead developed a drug that cures Hep C. The insurance companies think the cost is to high but the cost for treating patients with Hep C is far greater, had this drug not been developed. This is an election year and the politicians are trying to buy votes, it doesn't matter if it hurts the country in the long run by killing future development of wonder drugs. They just wanted to be elected this year.

APRIL 10, 2014 12:40 A.M.

Larry m cousins wrote:

Express Scripts has long followed the practice of delay and deny when it comes to fulfilling prescriptions on drugs other than generics. Their suggested practices are often devoid of medicinal validity. For example, they have suggested taking a pill at double the daily recommended dosage every other day instead of taking the recommended dosage every day. This allows the pill taker to purchase half as many pills providing savings supposedly to Express Scripts and their member client. This fails to consider the half life of various compounds and the need to keep a steady blood level concentration of the medicine. Again, not seeing the benefit of Sovaldi is short-sighted but consistent with Expess Scripts' philosophy.

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